Can It Be Done? Local, Direct, Automated Ads

In some ways, "Local" holds the same allure and mystery of "Mobile" for the digital ad ecosystem. How can they be unlocked through automated, advertising strategies?

For both, aggregation of demand through display ad networks has been the automated answer - i.e. solutions like Google's AdWords/AdSense. That's great for indirect sales, or smaller websites without a sales team, but for larger websites, facilitating automated direct local ad sales at a national scale still seems a ways off.

To be clear, from a sell-side perspective, the reason for enabling automated "direct" would be the ability to access the premium that local advertisers would be willing to pay. Meanwhile, buy siders might want to get a first crack (via direct) at local audiences according to their campaigns' geographic needs.

Ever hopeful, AdExchanger reached out to a group of executives in the online ad ecosystem to get their thoughts on the following:

What's the key to unlocking a direct local ad channel for large, national, online-only publishers?

"There's obviously a ton of money out there in local, but I think the first hurdle is that publishers are going to have to get comfortable with a pay-for-performance model. That's how that market works today, and in my opinion, it's the easiest path to draw dollars into a market clearly skeptical of display.

In addition to that, though, I'd like to see publishers have a spine when it comes to products - let people buy what they want and make price the consideration, not whether the targeting is available. That's the lesson from the failed promise of private exchanges - publishers didn't put any effort into productizing their private market offering, and no surprises, advertisers didn't see any value.

Personally, I think programmatic premium is a much more immediate option to service large deals for existing clients and not so much the local markets precisely because they don't need to make the leap from CPM to CPC and because those direct clients already largely know what they want to buy. I think folks should start there with their programmatic direct strategy and move to local as a phase two offering."

"I'm a pessimist on this... at least for the next 5 years. The mechanics, cost of sale and service, relatively low dollar value of the buyer, and so on all roll up into a model that is just too hard today. To unlock it you'd need boots on the ground in locales (perhaps a job for the unemployed print/radio guys) using technology that allowed for super efficient self-service buying and campaign management (including build a banner, etc) with better attribution for offline results. Because local buyers just aren't thinking too much about digital until someone walks in and says "I saw your banner ad" or they can see the attribution funnel down to their POS credit card purchase - right or wrong, that's how the local SMBs will gauge success."

"At Cars.com, we do quite a bit of revenue locally, but I feel we have some built in advantages that would be tough to replicate if you operated in a different industry or vertical.

First, we have an endemic niche. For us, that’s local car dealers. They have established budgets and marketing goals and they are stationary targets for your sales team. Perhaps the endemic customer base isn’t a requirement, but it sure makes it a lot easier to focus your sales and marketing efforts.

Second, we have a large in-market sales force. For small business owners, there’s no substitute for personalized attention. Even if you had something that is automated, you’d still need some minimum level of personal communication. Remember, you are not just competing against Google AdWords. You are competing for a share of their very limited marketing budget against companies like local TV, radio, print, and outdoor. All of which appear in person to ask for their business.

Third, we have very little competition between local and national over the same inventory, which is partly by design and party good fortune. How will your local customer feel about buying 'leftover' and “remnant” that isn’t sold Nationally? Or in reverse, will National still have appetite for a placement that is already sold out in the top 10 DMAs? It’s seductive to think that you can accept both sales at once, but in my experience, there is always some level of cannibalization. This obviously isn’t an issue if you have so much inventory that you will never run out anyway. But for many web properties there is a finite audience, so selling locally opens the door to evaluating Price/Quantity tradeoffs. Thoughtfully evaluating your areas of overlapping demand is critical to success."

"Like most everything in the digital space, local is currently a victim of complexity and a lack of transparency. How do I get it, what am I getting, when will I get it and so forth. The flip side to complexity (at least in this construct) is control and feedback once you have mastered the nuance. But that mastery and the often opaque nature of online buying are huge friction points to scale. So somewhat long way around to saying that like the rest of the online ad ecosystem, transparency and ease of use will herald huge gains in local digital spend. And it is only a matter of when vs. if that these two things will happen. Here's to hoping that when is sooner rather than later..."